DOCUMENT_AND_ENTITY_INFORMATIO
DOCUMENT AND ENTITY INFORMATION | 9 Months Ended | |
Sep. 30, 2014 | Nov. 05, 2014 | |
Document and Entity Information Abstract | ' | ' |
Entity Registrant Name | 'StarTek, Inc. | ' |
Entity Central Index Key | '0001031029 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Well-known Seasoned Issuer | 'No | ' |
Entity Voluntary Filers | 'No | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 15,409,394 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Revenue | $61,438 | $58,448 | $185,901 | $167,834 |
Cost of services | 52,393 | 51,928 | 162,946 | 150,965 |
Gross profit | 9,045 | 6,520 | 22,955 | 16,869 |
Selling, general and administrative expenses | 7,503 | 7,153 | 23,052 | 21,601 |
Impairment losses and restructuring charges, net | 1,262 | 0 | 3,504 | -437 |
Operating income (loss) | 280 | -633 | -3,601 | -4,295 |
Interest and other income (expense), net | 362 | -1,075 | 216 | -1,009 |
Income (loss) before income taxes | 642 | -1,708 | -3,385 | -5,304 |
Income tax expense | 728 | 83 | 482 | 87 |
Net loss | -86 | -1,791 | -3,867 | -5,391 |
Other comprehensive income (loss), net of tax: | ' | ' | ' | ' |
Foreign currency translation adjustments | -582 | -145 | -657 | -671 |
Change in fair value of derivative instruments | -905 | 632 | 227 | -2,244 |
Comprehensive loss | ($1,573) | ($1,304) | ($4,297) | ($8,306) |
Net loss per common share - basic and diluted (in usd per share) | ($0.01) | ($0.12) | ($0.25) | ($0.35) |
Weighted average common shares outstanding - basic and diluted (in shares) | 15,400 | 15,351 | 15,389 | 15,330 |
CONSOLIDATED_BALANCE_SHEETS_Un
CONSOLIDATED BALANCE SHEETS (Unaudited) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $6,552 | $10,989 |
Trade accounts receivable, net | 46,003 | 43,708 |
Deferred income tax assets | 67 | 157 |
Prepaid expenses | 2,268 | 2,939 |
Other current assets | 914 | 2,271 |
Total current assets | 55,804 | 60,064 |
Property, plant and equipment, net | 24,377 | 22,210 |
Long-term deferred income tax assets | 1,237 | 2,151 |
Intangible assets, net | 737 | 1,164 |
Goodwill | 2,002 | 1,637 |
Other long-term assets | 2,477 | 2,491 |
Total assets | 86,634 | 89,717 |
Current liabilities: | ' | ' |
Accounts payable | 7,879 | 8,477 |
Accrued liabilities: | ' | ' |
Accrued payroll and compensated absences | 10,223 | 11,665 |
Accrued restructuring costs | 627 | 16 |
Other accrued liabilities | 2,260 | 1,901 |
Line of credit | 2,500 | 1,000 |
Derivative liability | 1,932 | 2,160 |
Deferred income tax liabilities | 766 | 766 |
Other current liabilities | 1,957 | 2,513 |
Total current liabilities | 28,144 | 28,498 |
Deferred rent | 1,407 | 1,445 |
Other liabilities | 1,873 | 1,600 |
Total liabilities | 31,424 | 31,543 |
Commitments and contingencies | ' | ' |
Stockholders' equity: | ' | ' |
Common stock, 32,000,000 non-convertible shares, $0.01 par value, authorized; 15,406,453 and 15,368,356 shares issued and outstanding at September 30, 2014 and December 31, 2013, respectively | 154 | 154 |
Additional paid-in capital | 75,607 | 74,273 |
Accumulated other comprehensive loss | -1,439 | -1,009 |
Accumulated deficit | -19,112 | -15,244 |
Total stockholders' equity | 55,210 | 58,174 |
Total liabilities and stockholders' equity | $86,634 | $89,717 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS [Parenthetical] (Unaudited) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Statement of Financial Position [Abstract] | ' | ' |
Common stock, par value (in usd per share) | $0.01 | $0.01 |
Common stock, non-convertible shares authorized | 32,000,000 | 32,000,000 |
Common stock, shares issued | 15,406,453 | 15,368,356 |
Common stock, shares outstanding | 15,406,453 | 15,368,356 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Operating Activities | ' | ' |
Net loss | ($3,867) | ($5,391) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 7,629 | 9,585 |
(Gains) losses on disposal of assets | -182 | 898 |
(Gain) on dissolution of subsidiary | -413 | ' |
Share-based compensation expense | 1,207 | 1,255 |
Amortization of deferred gain on sale leaseback transaction | -214 | -206 |
Deferred income taxes | 955 | -180 |
Changes in operating assets and liabilities: | ' | ' |
Trade accounts receivable, net | -2,328 | -3,798 |
Prepaid expenses and other assets | 1,873 | -570 |
Accounts payable | -982 | -194 |
Accrued and other liabilities | -723 | 693 |
Net cash provided by operating activities | 2,955 | 2,092 |
Investing Activities | ' | ' |
Proceeds from note receivable | 481 | 495 |
Proceeds from sale of assets | 1,064 | 0 |
Purchases of property, plant and equipment | -9,562 | -4,054 |
Cash paid for acquisitions of businesses | -603 | -1,889 |
Net cash used in investing activities | -8,620 | -5,448 |
Financing Activities | ' | ' |
Proceeds from stock option exercises | 39 | 140 |
Proceeds from the issuance of common stock | 89 | 79 |
Proceeds from line of credit | 111,172 | 13,662 |
Principal payments on line of credit | -109,672 | -13,662 |
Principal payments on long-term debt | -94 | ' |
Principal payments on capital lease obligations | -92 | -16 |
Net cash provided by financing activities | 1,442 | 203 |
Effect of exchange rate changes on cash | -214 | -13 |
Net decrease in cash and cash equivalents | -4,437 | -3,166 |
Cash and cash equivalents at beginning of period | 10,989 | 9,183 |
Cash and cash equivalents at end of period | $6,552 | $6,017 |
BASIS_OF_PRESENTATION_AND_SUMM
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2014 | |
Accounting Policies [Abstract] | ' |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all information and footnotes required by GAAP for complete financial statements. These financial statements reflect all adjustments (consisting only of normal recurring entries, except as noted) which, in the opinion of management, are necessary for fair presentation. Operating results for the three and nine months ended September 30, 2014, are not necessarily indicative of operating results that may be expected during any other interim period of 2014 or the year ending December 31, 2014. | |
The consolidated balance sheet as of December 31, 2013, included herein was derived from the audited financial statements as of that date, but does not include all disclosures including notes required by GAAP. As such, the information included in this quarterly report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013. | |
Unless otherwise noted in this report, any description of "us," "we," or "our," refers to StarTek, Inc. and its subsidiaries. Financial information in this report is presented in U.S. dollars. | |
Use of Estimates | |
The preparation of our consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts included in the financial statements and accompanying notes. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the period they are determined to be necessary. | |
Recently Issued Accounting Standards | |
In August 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-15, Presentation of Financial Statements—Going Concern: Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The standard requires an entity's management to evaluate whether there are conditions or events that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued. Public entities are required to apply the standard for annual reporting periods ending after December 15, 2016, and interim periods thereafter. Early application is permitted. We do not expect the adoption of this standard to have a material impact on our financial statements or disclosures. | |
In June 2014, the FASB issued ASU 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period (a consensus of the FASB Emerging Issues Task Force). The ASU clarifies that entities should treat performance targets that can be met after the requisite service period of a share-based payment award as performance conditions that affect vesting. Therefore, an entity would not record compensation expense (measured as of the grant date without taking into account the effect of the performance target) related to an award for which transfer to the employee is contingent on the entity’s satisfaction of a performance target until it becomes probable that the performance target will be met. The ASU does not contain any new disclosure requirements. The ASU is effective for reporting periods beginning after December 15, 2015. Early adoption is permitted. We do not expect the adoption of this standard to have a material impact on our financial statements. | |
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). ASU 2014-09 amends the guidance for revenue recognition to replace numerous, industry-specific requirements and converges areas under this topic with those of the International Financial Reporting Standards. The ASU implements a five-step process for customer contract revenue recognition that focuses on transfer of control, as opposed to transfer of risk and rewards. The amendment also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenues and cash flows from contracts with customers. Other major provisions include the capitalization and amortization of certain contract costs, ensuring the time value of money is considered in the transaction price, and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances. The amendments in this ASU are effective for reporting periods beginning after December 15, 2016, and early adoption is prohibited. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. We are currently assessing the impact the adoption of ASU 2014-09 will have on our financial statements. |
ACQUISITION
ACQUISITION | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Business Combinations [Abstract] | ' | ||||
ACQUISITIONS | ' | ||||
ACQUISITION | |||||
RN's On Call | |||||
On July 24, 2013, we acquired RN's On Call, a business process outsourcing provider in the health care industry, for approximately $1,455, net of interest incurred. The company provides health care related services to patients on behalf of the professional medical community. | |||||
As of September 30, 2014, we paid approximately $1,200 of the purchase price with the remaining balance to be paid by January 2015, which is included in other accrued liabilities on the consolidated balance sheet. Minimal acquisition-related expenses were paid, which are recorded in selling, general and administrative expenses. Financial results from the date of acquisition are included in the results of operations within our Domestic segment. | |||||
We finalized our purchase price allocation during the three months ended March 31, 2014. The following summarizes the final purchase price allocation of the fair values of the assets acquired as of the acquisition date. There were no other assets or liabilities acquired. | |||||
Acquisition Date | |||||
Fair Value | |||||
Customer base | $ | 340 | |||
Goodwill | 1,115 | ||||
Total purchase price | $ | 1,455 | |||
The customer base has an estimated useful life of ten years. The goodwill recognized was attributable primarily to the acquired workforce and our ability to expand into the health care industry. |
GOODWILL_AND_INTANGIBLE_ASSETS
GOODWILL AND INTANGIBLE ASSETS (Notes) | 9 Months Ended | ||||||||||||||
Sep. 30, 2014 | |||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||||||||||||||
GOODWILL AND INTANGIBLE ASSETS | ' | ||||||||||||||
GOODWILL AND INTANGIBLE ASSETS | |||||||||||||||
Goodwill | |||||||||||||||
The goodwill of $2,002 recognized from our acquisitions during 2013 was assigned to our Domestic segment. The tax basis of the goodwill is deductible for income tax purposes. | |||||||||||||||
Intangible Assets | |||||||||||||||
The following table presents our intangible assets as of September 30, 2014: | |||||||||||||||
Gross Intangibles | Accumulated Amortization | Net Intangibles | Weighted Average Amortization Period (years) | ||||||||||||
Developed technology | $ | 390 | $ | 73 | $ | 317 | 3.63 | ||||||||
Customer base | 470 | 105 | 365 | 4.29 | |||||||||||
Trade name | 70 | 18 | 52 | 2.78 | |||||||||||
Noncompete agreement | 10 | 7 | 3 | 0.5 | |||||||||||
$ | 940 | $ | 203 | $ | 737 | 3.89 | |||||||||
Expected future amortization of intangible assets as of September 30, 2014 is as follows: | |||||||||||||||
Year Ending December 31, | Amount | ||||||||||||||
Remainder of 2014 | $ | 36 | |||||||||||||
2015 | 139 | ||||||||||||||
2016 | 105 | ||||||||||||||
2017 | 94 | ||||||||||||||
2018 | 94 | ||||||||||||||
Thereafter | 269 | ||||||||||||||
IMPAIRMENT_LOSSES_AND_RESTRUCT
IMPAIRMENT LOSSES AND RESTRUCTURING CHARGES | 9 Months Ended | |||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||
Restructuring and Related Activities [Abstract] | ' | |||||||||||||||||||
IMPAIRMENT LOSSES AND RESTRUCTURING CHARGES | ' | |||||||||||||||||||
IMPAIRMENT LOSSES AND RESTRUCTURING CHARGES | ||||||||||||||||||||
Impairment Losses | ||||||||||||||||||||
During the three and nine months ended September 30, 2014 and 2013, we did not incur any impairment losses. | ||||||||||||||||||||
Restructuring Charges | ||||||||||||||||||||
A summary of the activity under the restructuring plans as of September 30, 2014 is as follows: | ||||||||||||||||||||
Facility-Related/Employee-Related Costs | ||||||||||||||||||||
Victoria | Jonesboro | Costa Rica | Corporate | Total | ||||||||||||||||
Balance as of December 31, 2013 | $ | 16 | $ | — | $ | — | $ | — | $ | 16 | ||||||||||
Expense | — | 792 | 1,392 | 284 | 2,468 | |||||||||||||||
Payments, net of receipts for sublease | — | (719 | ) | (951 | ) | (187 | ) | (1,857 | ) | |||||||||||
Balance as of September 30, 2014 | $ | 16 | $ | 73 | $ | 441 | $ | 97 | $ | 627 | ||||||||||
We entered into a sublease agreement for our Victoria, Texas facility through the remainder of its lease term in 2014. The reserves listed above are net of expected sublease rental income. We have recorded an accrual for certain property taxes we still owe in Victoria, which we expect to pay through 2014. | ||||||||||||||||||||
In February 2014, we announced the closure of our Jonesboro, Arkansas facility, which ceased operations in the second quarter of 2014 when the business transitioned to another facility. We established a restructuring reserve of $192 for employee related costs and recognized additional charges of $600 when the facility closed. These costs are expected to be paid out through 2014. We also recognized a net gain of $256 related to the early termination of our lease. | ||||||||||||||||||||
In June 2014, we announced the closure of our Heredia, Costa Rica facility, included in our Latin America segment, which ceased operations in the third quarter of 2014. We established a restructuring reserve of $1,004 for employee related costs and recognized additional charges in the third quarter of 2014 of $388 when the facility closed. The restructuring charges for those employees who continue to work after the notification date will be recognized over the service period. These costs are expected to be paid out through December 2014. | ||||||||||||||||||||
During the first nine months of 2014, we continued to pursue operating efficiencies through streamlining our organizational structure and leveraging our shared services centers in low-cost regions. We eliminated several positions as a result and incurred a restructuring charge of $284. The cash payments for these employees will be substantially completed by the fourth quarter of 2014. | ||||||||||||||||||||
During the second quarter of 2014, we moved forward with our initiative to outsource our data centers and move to a hosted solutions model. We recognized $1,300 of restructuring charges as of September 30, 2014, of which $200 is included in other accrued liabilities for costs incurred and not yet paid as of September 30, 2014. Additional transition costs will be recognized throughout the remainder of 2014 as restructuring charges as incurred in operating income and are expected to be approximately $500. |
NET_LOSS_PER_SHARE
NET LOSS PER SHARE | 9 Months Ended |
Sep. 30, 2014 | |
Earnings Per Share [Abstract] | ' |
NET LOSS PER SHARE | ' |
NET LOSS PER SHARE | |
Basic net loss per common share is computed on the basis of our weighted average number of common shares outstanding. Diluted earnings per share is computed on the basis of our weighted average number of common shares outstanding plus the effect of dilutive stock options and non-vested restricted stock using the treasury stock method. Securities totaling 2,289,041 and 2,288,769 for the three and nine months ended September 30, 2014 and 2013, respectively, have been excluded from loss per share because their effect would have been anti-dilutive. |
PRINCIPAL_CLIENTS
PRINCIPAL CLIENTS | 9 Months Ended | ||||||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||||||
Risks and Uncertainties [Abstract] | ' | ||||||||||||||||||||||||||||
PRINCIPAL CLIENTS | ' | ||||||||||||||||||||||||||||
PRINCIPAL CLIENTS | |||||||||||||||||||||||||||||
The following table represents revenue concentration of our principal clients: | |||||||||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||||||
Revenue | Percentage | Revenue | Percentage | Revenue | Percentage | Revenue | Percentage | ||||||||||||||||||||||
T-Mobile USA, Inc., a subsidiary of Deutsche Telekom (2) | $ | 19,594 | 31.9 | % | $ | 16,469 | 28.2 | % | $ | 57,018 | 30.7 | % | $ | 44,846 | 26.7 | % | |||||||||||||
AT&T Services, Inc. and AT&T Mobility, LLC, subsidiaries of AT&T, Inc. (1) | $ | 13,598 | 22.1 | % | $ | 14,868 | 25.4 | % | $ | 42,695 | 23 | % | $ | 42,770 | 25.5 | % | |||||||||||||
Comcast Cable Communications Management, LLC, subsidiary of Comcast Corporation (2) | $ | 9,087 | 14.8 | % | $ | 10,822 | 18.5 | % | $ | 30,824 | 16.6 | % | $ | 33,301 | 19.8 | % | |||||||||||||
Time Warner Cable Inc. (2) | $ | 6,800 | 11.1 | % | * | $ | 19,896 | 10.7 | % | * | |||||||||||||||||||
* Less than 10% | |||||||||||||||||||||||||||||
(1) Revenue from this customer is generated through our Domestic and Asia Pacific segments. | |||||||||||||||||||||||||||||
(2) Revenue from this customer is generated through our Domestic, Asia Pacific and Latin America segments. | |||||||||||||||||||||||||||||
We enter into contracts and perform services with our major clients that fall under the scope of master service agreements (MSAs) with statements of work (SOWs) specific to each line of business. These MSAs and SOWs may automatically renew or be extended by mutual agreement and are generally terminable by the customer or us with prior written notice. | |||||||||||||||||||||||||||||
On July 28, 2011, we entered into a new MSA with T-Mobile effective July 1, 2011, which has an initial term of five years and will automatically renew for additional one-year periods thereafter, but may be terminated by T-Mobile upon 90 days written notice. | |||||||||||||||||||||||||||||
Our initial MSA with AT&T had been extended through January 31, 2013. On January 25, 2013, we entered into a new MSA with AT&T Services, Inc., which expires December 31, 2015 and may be extended upon mutual agreement, but may be terminated by AT&T with written notice. | |||||||||||||||||||||||||||||
On January 4, 2014, we entered into a new MSA with Comcast, effective June 22, 2013, which replaced the original MSA that was signed in 2011 and would have expired in 2014. The new MSA has an initial term of one year and will automatically renew for additional one-year periods unless either party gives notice of cancellation. Comcast may terminate the agreement upon 90 days written notice. | |||||||||||||||||||||||||||||
On February 15, 2014, we signed an amendment to an MSA with Time Warner Cable, which provides for the same services as the original MSA that was signed in February 2011 and expired in February 2014. The amendment extends the term to February 15, 2017, but may be terminated by either party with written notice. |
DERIVATIVE_INSTRUMENTS
DERIVATIVE INSTRUMENTS | 9 Months Ended | ||||||
Sep. 30, 2014 | |||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | ||||||
DERIVATIVE INSTRUMENTS | ' | ||||||
DERIVATIVE INSTRUMENTS | |||||||
We use derivatives to partially offset our business exposure to foreign currency exchange risk. We enter into foreign currency exchange contracts to hedge our anticipated operating commitments that are denominated in foreign currencies, including forward contracts and range forward contracts (a transaction where both a call option is purchased and a put option is sold). The contracts cover periods commensurate with expected exposure, generally three to twelve months, and are principally unsecured foreign exchange contracts. The market risk exposure is essentially limited to risk related to currency rate movements. We operate in Canada, the Philippines, Costa Rica and Honduras. The functional currencies in Canada and the Philippines are the Canadian dollar and the Philippine peso, which are used to pay labor and other operating costs in those countries. We provide funds for these operating costs as our client contracts generate revenues which are paid in U.S. dollars. In Costa Rica and Honduras, our functional currency is the U.S. dollar and the majority of our costs are denominated in U.S. dollars. As of September 30, 2014, we have not entered into any arrangements to hedge our exposure to fluctuations in the Costa Rican colon or the Honduran lempira relative to the U.S. dollar. | |||||||
We have elected to designate our derivatives as cash flow hedges in order to associate the results of the hedges with forecasted expenses. Unrealized gains and losses are recorded in accumulated other comprehensive income (“AOCI”) and will be re-classified to operations as the forecasted expenses are incurred, typically within one year. During the three and nine months ended September 30, 2014 and 2013, our cash flow hedges were highly effective and hedge ineffectiveness was not material. | |||||||
The following table shows the notional amount of our foreign exchange cash flow hedging instruments as of September 30, 2014: | |||||||
Local Currency Notional Amount | U.S. Dollar Notional Amount | ||||||
Canadian Dollar | 9,600 | $ | 8,872 | ||||
Philippine Peso | 1,595,610 | 36,966 | |||||
$ | 45,838 | ||||||
Derivative assets and liabilities associated with our hedging activities are measured at gross fair value as described in Note 8 and are reflected as separate line items in our consolidated balance sheets. |
FAIR_VALUE_MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||
FAIR VALUE MEASUREMENTS | ' | |||||||||||||||
FAIR VALUE MEASUREMENTS | ||||||||||||||||
The carrying value of our cash and cash equivalents, accounts receivable, notes receivable, accounts payable and line of credit approximate fair value because of their short-term nature. | ||||||||||||||||
Derivative Instruments and Hedging Activities | ||||||||||||||||
The values of our derivative instruments are derived from pricing models using inputs based upon market information, including contractual terms, market prices and yield curves. The significant inputs to the valuation pricing models are observable in the market, and as such the derivatives are classified as Level 2 in the fair value hierarchy. | ||||||||||||||||
Restructuring Charges | ||||||||||||||||
Accrued restructuring costs were valued using a discounted cash flow model. Significant assumptions used in determining the amount of the estimated liability for closing a facility are the estimated liability for future lease payments on vacant facilities and the discount rate utilized to determine the present value of the future expected cash flows. If the assumptions regarding early termination and the timing and amounts of sublease payments prove to be inaccurate, we may be required to record additional losses, or conversely, a future gain, in the consolidated statements of operations and comprehensive income (loss). | ||||||||||||||||
In the future, if we sublease for periods that differ from our assumption or if an actual buy-out of a lease differs from our estimate, we may be required to record a gain or loss. Future cash flows also include estimated property taxes through the remainder of the lease term, which are valued based upon historical tax payments. Given that the restructuring charges were valued using our internal estimates using a discounted cash flow model, we have classified the accrued restructuring costs as Level 3 in the fair value hierarchy. | ||||||||||||||||
Fair Value Hierarchy | ||||||||||||||||
The following tables set forth our assets and liabilities measured at fair value on a recurring basis and a non-recurring basis by level within the fair value hierarchy. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. | ||||||||||||||||
Liabilities Measured at Fair Value | ||||||||||||||||
on a Recurring Basis as of September 30, 2014 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Liabilities: | ||||||||||||||||
Foreign exchange contracts | $ | — | $ | 1,932 | $ | — | $ | 1,932 | ||||||||
Total fair value of liabilities measured on a recurring basis | $ | — | $ | 1,932 | $ | — | $ | 1,932 | ||||||||
Liabilities Measured at Fair Value | ||||||||||||||||
on a Recurring Basis as of December 31, 2013 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Liabilities: | ||||||||||||||||
Foreign exchange contracts | $ | — | $ | 2,160 | $ | — | $ | 2,160 | ||||||||
Total fair value of liabilities measured on a recurring basis | $ | — | $ | 2,160 | $ | — | $ | 2,160 | ||||||||
Liabilities Measured at Fair Value on a | ||||||||||||||||
Non-Recurring Basis as of September 30, 2014 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Liabilities: | ||||||||||||||||
Accrued restructuring costs | $ | — | $ | — | $ | 627 | $ | 627 | ||||||||
Total fair value of liabilities measured on a non-recurring basis | $ | — | $ | — | $ | 627 | $ | 627 | ||||||||
Assets and Liabilities Measured at Fair Value on a | ||||||||||||||||
Non-Recurring Basis as of December 31, 2013 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets: | ||||||||||||||||
Property, plant and equipment, net | $ | — | $ | — | 531 | 531 | ||||||||||
Total fair value of assets measured on a non-recurring basis | $ | — | $ | — | $ | 531 | $ | 531 | ||||||||
Liabilities: | ||||||||||||||||
Accrued restructuring costs | $ | — | $ | — | $ | 16 | $ | 16 | ||||||||
Total fair value of liabilities measured on a non-recurring basis | $ | — | $ | — | $ | 16 | $ | 16 | ||||||||
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2014 | |
Debt Disclosure [Abstract] | ' |
DEBT | ' |
DEBT | |
Line of Credit | |
Effective February 28, 2012, we entered into a secured revolving credit facility ("Credit Agreement") with Wells Fargo Bank. The Credit Agreement has a maturity date of February 28, 2016. The amount we may borrow under the Credit Agreement is the lesser of the borrowing base calculation and $15,000, and, so long as no default has occurred, we may increase the maximum availability to $20,000 in $2,500 increments. As of September 30, 2014, we had $2,500 outstanding borrowings on our credit facility and available capacity was $12,420, net of $80 of letters of credit backed by the facility. | |
Under the Credit Agreement, we are subject to certain standard affirmative and negative covenants, including the following financial covenants: 1) maintaining a Minimum Adjusted EBITDA, as defined in the Credit Agreement, of no less than the cumulative month-end minimum amounts set forth in an amendment to the Credit Agreement and 2) limiting non-financed capital expenditures to no more than the cumulative month-end maximum amounts set forth in an amendment to the Credit Agreement. We were in compliance with all such covenants as of September 30, 2014. | |
In March 2014, the Company and Wells Fargo agreed on the financial covenants for 2014 and the first quarter of 2015, constituting the Sixth Amendment to the Credit Agreement. This amendment also amended certain definitions and fees. In June 2014, we entered into a Seventh Amendment to the Credit Agreement adjusting the financial covenants through the first quarter of 2015. | |
Financing Agreement | |
We entered into a financing agreement for the purchase of certain software licenses and related hardware for approximately $1,000, which were delivered and placed into service in April 2014. Monthly payments commenced July 2014. The current portion of $367 and the long term portion of $602 are included in other current liabilities and other liabilities, respectively, on the consolidated balance sheet. |
SHAREBASED_COMPENSATION
SHARE-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' |
SHARE-BASED COMPENSATION | ' |
SHARE-BASED COMPENSATION | |
Our share-based compensation arrangements include grants of stock options, restricted stock awards and deferred stock units under the StarTek, Inc. 2008 Equity Incentive Plan, certain awards granted outside of these plans and our Employee Stock Purchase Plan. The compensation expense that has been charged against income for stock option awards and restricted stock for the three and nine months ended September 30, 2014 was $343 and $1,207, respectively, and for the three and nine months ended September 30, 2013 was $398 and $1,255, respectively, and is included in selling, general and administrative expense. As of September 30, 2014, there was $1,632 of total unrecognized compensation expense related to nonvested stock options, which is expected to be recognized over a weighted-average period of 1.9 years. |
ACCUMULATED_OTHER_COMPREHENSIV
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 9 Months Ended | ||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||
Stockholders' Equity Note [Abstract] | ' | ||||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | ' | ||||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | |||||||||||||||||||
Accumulated other comprehensive income (loss) consisted of the following items: | |||||||||||||||||||
Foreign Currency Translation Adjustment | Derivatives Accounted for as Cash Flow Hedges | Total | |||||||||||||||||
Balance at December 31, 2013 | $ | 1,900 | $ | (2,909 | ) | $ | (1,009 | ) | |||||||||||
Foreign currency translation | (657 | ) | — | (657 | ) | ||||||||||||||
Reclassification to operations | — | 2,367 | 2,367 | ||||||||||||||||
Unrealized gains (losses) | — | (2,140 | ) | (2,140 | ) | ||||||||||||||
Balance at September 30, 2014 | $ | 1,243 | $ | (2,682 | ) | $ | (1,439 | ) | |||||||||||
Reclassifications out of accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2014 and 2013 were as follows: | |||||||||||||||||||
Details about Accumulated Other Comprehensive Loss Components | Amount Reclassified from Accumulated Other Comprehensive Loss | Affected Line Item in the Statement Where Net Income is Presented | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||
(Gains) losses on cash flow hedges | |||||||||||||||||||
Foreign exchange contracts | $ | 324 | $ | (1,099 | ) | $ | 2,215 | $ | (925 | ) | Cost of services | ||||||||
Foreign exchange contracts | 17 | (69 | ) | 152 | (69 | ) | Selling, general and administrative expenses | ||||||||||||
Total reclassifications for the period | $ | 341 | $ | (1,168 | ) | $ | 2,367 | $ | (994 | ) | |||||||||
SEGMENT_INFORMATION
SEGMENT INFORMATION | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Segment Reporting [Abstract] | ' | |||||||
SEGMENT INFORMATION | ' | |||||||
SEGMENT INFORMATION | ||||||||
We operate our business within three reportable segments, based on the geographic regions in which our services are rendered: Domestic, Asia Pacific and Latin America. As of September 30, 2014, our Domestic segment included the operations of eight facilities in the U.S. and one facility in Canada. Our Asia Pacific segment included the operations of four facilities in the Philippines and our Latin America segment included two facilities in Honduras. Operations at our facility in Costa Rica, which were included in our Latin America segment, ceased in August 2014. | ||||||||
We primarily evaluate segment operating performance in each reporting segment based on net sales, gross profit and working capital. Certain operating expenses are not allocated to each reporting segment; therefore, we do not present income statement information by reporting segment below the gross profit level. | ||||||||
Information about our reportable segments, which correspond to the geographic areas in which we operate, for the three and nine months ended September 30, 2014 and 2013 is as follows: | ||||||||
For the Three Months Ended September 30, | ||||||||
2014 | 2013 | |||||||
Revenue: | ||||||||
Domestic | $ | 30,703 | $ | 30,164 | ||||
Asia Pacific | 22,469 | 20,470 | ||||||
Latin America | 8,266 | 7,814 | ||||||
Total | $ | 61,438 | $ | 58,448 | ||||
Gross profit: | ||||||||
Domestic | $ | 3,041 | $ | 2,963 | ||||
Asia Pacific | 5,082 | 2,681 | ||||||
Latin America | 922 | 876 | ||||||
Total | $ | 9,045 | $ | 6,520 | ||||
For the Nine Months Ended September 30, | ||||||||
2014 | 2013 | |||||||
Revenue: | ||||||||
Domestic | $ | 94,941 | $ | 87,074 | ||||
Asia Pacific | 64,558 | 60,031 | ||||||
Latin America | 26,402 | 20,729 | ||||||
Total | $ | 185,901 | $ | 167,834 | ||||
Gross profit: | ||||||||
Domestic | $ | 10,225 | $ | 9,432 | ||||
Asia Pacific | 11,316 | 7,048 | ||||||
Latin America | 1,414 | 389 | ||||||
Total | $ | 22,955 | $ | 16,869 | ||||
SUBSEQUENT_EVENT_Notes
SUBSEQUENT EVENT (Notes) | 9 Months Ended |
Sep. 30, 2014 | |
Subsequent Events [Abstract] | ' |
SUBSEQUENT EVENT | ' |
SUBSEQUENT EVENT | |
On October 1, 2014, we acquired Collections Center, Inc., a North Dakota based receivables management company, for approximately $4,350 in cash. |
BASIS_OF_PRESENTATION_AND_SUMM1
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Use of Estimates | ' |
Use of Estimates | |
The preparation of our consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts included in the financial statements and accompanying notes. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the period they are determined to be necessary. | |
Recently Issued Accounting Standards | ' |
Recently Issued Accounting Standards | |
In August 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-15, Presentation of Financial Statements—Going Concern: Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The standard requires an entity's management to evaluate whether there are conditions or events that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued. Public entities are required to apply the standard for annual reporting periods ending after December 15, 2016, and interim periods thereafter. Early application is permitted. We do not expect the adoption of this standard to have a material impact on our financial statements or disclosures. | |
In June 2014, the FASB issued ASU 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period (a consensus of the FASB Emerging Issues Task Force). The ASU clarifies that entities should treat performance targets that can be met after the requisite service period of a share-based payment award as performance conditions that affect vesting. Therefore, an entity would not record compensation expense (measured as of the grant date without taking into account the effect of the performance target) related to an award for which transfer to the employee is contingent on the entity’s satisfaction of a performance target until it becomes probable that the performance target will be met. The ASU does not contain any new disclosure requirements. The ASU is effective for reporting periods beginning after December 15, 2015. Early adoption is permitted. We do not expect the adoption of this standard to have a material impact on our financial statements. | |
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). ASU 2014-09 amends the guidance for revenue recognition to replace numerous, industry-specific requirements and converges areas under this topic with those of the International Financial Reporting Standards. The ASU implements a five-step process for customer contract revenue recognition that focuses on transfer of control, as opposed to transfer of risk and rewards. The amendment also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenues and cash flows from contracts with customers. Other major provisions include the capitalization and amortization of certain contract costs, ensuring the time value of money is considered in the transaction price, and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances. The amendments in this ASU are effective for reporting periods beginning after December 15, 2016, and early adoption is prohibited. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. We are currently assessing the impact the adoption of ASU 2014-09 will have on our financial statements. |
ACQUISITION_Tables
ACQUISITION (Tables) (RN's On Call) | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
RN's On Call | ' | ||||
Business Acquisition [Line Items] | ' | ||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | ' | ||||
The following summarizes the final purchase price allocation of the fair values of the assets acquired as of the acquisition date. There were no other assets or liabilities acquired. | |||||
Acquisition Date | |||||
Fair Value | |||||
Customer base | $ | 340 | |||
Goodwill | 1,115 | ||||
Total purchase price | $ | 1,455 | |||
GOODWILL_AND_INTANGIBLE_ASSETS1
GOODWILL AND INTANGIBLE ASSETS (Tables) | 9 Months Ended | ||||||||||||||
Sep. 30, 2014 | |||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||||||||||||||
Schedule of Finite-Lived Intangible Assets | ' | ||||||||||||||
The following table presents our intangible assets as of September 30, 2014: | |||||||||||||||
Gross Intangibles | Accumulated Amortization | Net Intangibles | Weighted Average Amortization Period (years) | ||||||||||||
Developed technology | $ | 390 | $ | 73 | $ | 317 | 3.63 | ||||||||
Customer base | 470 | 105 | 365 | 4.29 | |||||||||||
Trade name | 70 | 18 | 52 | 2.78 | |||||||||||
Noncompete agreement | 10 | 7 | 3 | 0.5 | |||||||||||
$ | 940 | $ | 203 | $ | 737 | 3.89 | |||||||||
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | ' | ||||||||||||||
Expected future amortization of intangible assets as of September 30, 2014 is as follows: | |||||||||||||||
Year Ending December 31, | Amount | ||||||||||||||
Remainder of 2014 | $ | 36 | |||||||||||||
2015 | 139 | ||||||||||||||
2016 | 105 | ||||||||||||||
2017 | 94 | ||||||||||||||
2018 | 94 | ||||||||||||||
Thereafter | 269 | ||||||||||||||
IMPAIRMENT_LOSSES_AND_RESTRUCT1
IMPAIRMENT LOSSES AND RESTRUCTURING CHARGES (Tables) | 9 Months Ended | |||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||
Restructuring and Related Activities [Abstract] | ' | |||||||||||||||||||
Schedule of Restructuring and Related Costs | ' | |||||||||||||||||||
A summary of the activity under the restructuring plans as of September 30, 2014 is as follows: | ||||||||||||||||||||
Facility-Related/Employee-Related Costs | ||||||||||||||||||||
Victoria | Jonesboro | Costa Rica | Corporate | Total | ||||||||||||||||
Balance as of December 31, 2013 | $ | 16 | $ | — | $ | — | $ | — | $ | 16 | ||||||||||
Expense | — | 792 | 1,392 | 284 | 2,468 | |||||||||||||||
Payments, net of receipts for sublease | — | (719 | ) | (951 | ) | (187 | ) | (1,857 | ) | |||||||||||
Balance as of September 30, 2014 | $ | 16 | $ | 73 | $ | 441 | $ | 97 | $ | 627 | ||||||||||
PRINCIPAL_CLIENTS_Tables
PRINCIPAL CLIENTS (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||||||
Risks and Uncertainties [Abstract] | ' | ||||||||||||||||||||||||||||
Schedule of Revenue by Major Customers | ' | ||||||||||||||||||||||||||||
The following table represents revenue concentration of our principal clients: | |||||||||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||||||
Revenue | Percentage | Revenue | Percentage | Revenue | Percentage | Revenue | Percentage | ||||||||||||||||||||||
T-Mobile USA, Inc., a subsidiary of Deutsche Telekom (2) | $ | 19,594 | 31.9 | % | $ | 16,469 | 28.2 | % | $ | 57,018 | 30.7 | % | $ | 44,846 | 26.7 | % | |||||||||||||
AT&T Services, Inc. and AT&T Mobility, LLC, subsidiaries of AT&T, Inc. (1) | $ | 13,598 | 22.1 | % | $ | 14,868 | 25.4 | % | $ | 42,695 | 23 | % | $ | 42,770 | 25.5 | % | |||||||||||||
Comcast Cable Communications Management, LLC, subsidiary of Comcast Corporation (2) | $ | 9,087 | 14.8 | % | $ | 10,822 | 18.5 | % | $ | 30,824 | 16.6 | % | $ | 33,301 | 19.8 | % | |||||||||||||
Time Warner Cable Inc. (2) | $ | 6,800 | 11.1 | % | * | $ | 19,896 | 10.7 | % | * | |||||||||||||||||||
* Less than 10% | |||||||||||||||||||||||||||||
(1) Revenue from this customer is generated through our Domestic and Asia Pacific segments. | |||||||||||||||||||||||||||||
(2) Revenue from this customer is generated through our Domestic, Asia Pacific and Latin America segments. |
DERIVATIVE_INSTRUMENTS_Tables
DERIVATIVE INSTRUMENTS (Tables) | 9 Months Ended | ||||||
Sep. 30, 2014 | |||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | ||||||
Schedule of Notional Amounts of Outstanding Derivative Positions | ' | ||||||
The following table shows the notional amount of our foreign exchange cash flow hedging instruments as of September 30, 2014: | |||||||
Local Currency Notional Amount | U.S. Dollar Notional Amount | ||||||
Canadian Dollar | 9,600 | $ | 8,872 | ||||
Philippine Peso | 1,595,610 | 36,966 | |||||
$ | 45,838 | ||||||
FAIR_VALUE_MEASUREMENTS_Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||
Fair Value Measurements, Recurring and Nonrecurring | ' | |||||||||||||||
The following tables set forth our assets and liabilities measured at fair value on a recurring basis and a non-recurring basis by level within the fair value hierarchy. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. | ||||||||||||||||
Liabilities Measured at Fair Value | ||||||||||||||||
on a Recurring Basis as of September 30, 2014 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Liabilities: | ||||||||||||||||
Foreign exchange contracts | $ | — | $ | 1,932 | $ | — | $ | 1,932 | ||||||||
Total fair value of liabilities measured on a recurring basis | $ | — | $ | 1,932 | $ | — | $ | 1,932 | ||||||||
Liabilities Measured at Fair Value | ||||||||||||||||
on a Recurring Basis as of December 31, 2013 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Liabilities: | ||||||||||||||||
Foreign exchange contracts | $ | — | $ | 2,160 | $ | — | $ | 2,160 | ||||||||
Total fair value of liabilities measured on a recurring basis | $ | — | $ | 2,160 | $ | — | $ | 2,160 | ||||||||
Liabilities Measured at Fair Value on a | ||||||||||||||||
Non-Recurring Basis as of September 30, 2014 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Liabilities: | ||||||||||||||||
Accrued restructuring costs | $ | — | $ | — | $ | 627 | $ | 627 | ||||||||
Total fair value of liabilities measured on a non-recurring basis | $ | — | $ | — | $ | 627 | $ | 627 | ||||||||
Assets and Liabilities Measured at Fair Value on a | ||||||||||||||||
Non-Recurring Basis as of December 31, 2013 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets: | ||||||||||||||||
Property, plant and equipment, net | $ | — | $ | — | 531 | 531 | ||||||||||
Total fair value of assets measured on a non-recurring basis | $ | — | $ | — | $ | 531 | $ | 531 | ||||||||
Liabilities: | ||||||||||||||||
Accrued restructuring costs | $ | — | $ | — | $ | 16 | $ | 16 | ||||||||
Total fair value of liabilities measured on a non-recurring basis | $ | — | $ | — | $ | 16 | $ | 16 | ||||||||
ACCUMULATED_OTHER_COMPREHENSIV1
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 9 Months Ended | ||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||
Stockholders' Equity Note [Abstract] | ' | ||||||||||||||||||
Schedule of Comprehensive Income (Loss) | ' | ||||||||||||||||||
Accumulated other comprehensive income (loss) consisted of the following items: | |||||||||||||||||||
Foreign Currency Translation Adjustment | Derivatives Accounted for as Cash Flow Hedges | Total | |||||||||||||||||
Balance at December 31, 2013 | $ | 1,900 | $ | (2,909 | ) | $ | (1,009 | ) | |||||||||||
Foreign currency translation | (657 | ) | — | (657 | ) | ||||||||||||||
Reclassification to operations | — | 2,367 | 2,367 | ||||||||||||||||
Unrealized gains (losses) | — | (2,140 | ) | (2,140 | ) | ||||||||||||||
Balance at September 30, 2014 | $ | 1,243 | $ | (2,682 | ) | $ | (1,439 | ) | |||||||||||
Reclassification out of Accumulated Other Comprehensive Income | ' | ||||||||||||||||||
Reclassifications out of accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2014 and 2013 were as follows: | |||||||||||||||||||
Details about Accumulated Other Comprehensive Loss Components | Amount Reclassified from Accumulated Other Comprehensive Loss | Affected Line Item in the Statement Where Net Income is Presented | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||
(Gains) losses on cash flow hedges | |||||||||||||||||||
Foreign exchange contracts | $ | 324 | $ | (1,099 | ) | $ | 2,215 | $ | (925 | ) | Cost of services | ||||||||
Foreign exchange contracts | 17 | (69 | ) | 152 | (69 | ) | Selling, general and administrative expenses | ||||||||||||
Total reclassifications for the period | $ | 341 | $ | (1,168 | ) | $ | 2,367 | $ | (994 | ) | |||||||||
SEGMENT_INFORMATION_Tables
SEGMENT INFORMATION (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Segment Reporting [Abstract] | ' | |||||||
Schedule of Segment Reporting Information, by Segment | ' | |||||||
Information about our reportable segments, which correspond to the geographic areas in which we operate, for the three and nine months ended September 30, 2014 and 2013 is as follows: | ||||||||
For the Three Months Ended September 30, | ||||||||
2014 | 2013 | |||||||
Revenue: | ||||||||
Domestic | $ | 30,703 | $ | 30,164 | ||||
Asia Pacific | 22,469 | 20,470 | ||||||
Latin America | 8,266 | 7,814 | ||||||
Total | $ | 61,438 | $ | 58,448 | ||||
Gross profit: | ||||||||
Domestic | $ | 3,041 | $ | 2,963 | ||||
Asia Pacific | 5,082 | 2,681 | ||||||
Latin America | 922 | 876 | ||||||
Total | $ | 9,045 | $ | 6,520 | ||||
For the Nine Months Ended September 30, | ||||||||
2014 | 2013 | |||||||
Revenue: | ||||||||
Domestic | $ | 94,941 | $ | 87,074 | ||||
Asia Pacific | 64,558 | 60,031 | ||||||
Latin America | 26,402 | 20,729 | ||||||
Total | $ | 185,901 | $ | 167,834 | ||||
Gross profit: | ||||||||
Domestic | $ | 10,225 | $ | 9,432 | ||||
Asia Pacific | 11,316 | 7,048 | ||||||
Latin America | 1,414 | 389 | ||||||
Total | $ | 22,955 | $ | 16,869 | ||||
ACQUISITION_Details
ACQUISITION (Details) (RN's On Call, USD $) | 0 Months Ended | 9 Months Ended |
In Thousands, unless otherwise specified | Jul. 24, 2013 | Sep. 30, 2014 |
Business Acquisition [Line Items] | ' | ' |
Business acquisition, purchase price | $1,455 | ' |
Payments to acquire business | ' | 1,200 |
Goodwill | 1,115 | ' |
Customer base [Member] | ' | ' |
Business Acquisition [Line Items] | ' | ' |
Customer base | $340 | ' |
Customer base, useful life | ' | '10 years |
GOODWILL_AND_INTANGIBLE_ASSETS2
GOODWILL AND INTANGIBLE ASSETS (Details) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 |
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ' |
Goodwill | $2,002 | $1,637 |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross Intangibles | ' | 940 |
Accumulated Amortization | 203 | ' |
Net Intangibles | 737 | 1,164 |
Weighted Average Amortization Period (years) | '3 years 10 months 21 days | ' |
Remainder of 2014 | 36 | ' |
2015 | 139 | ' |
2016 | 105 | ' |
2017 | 94 | ' |
2018 | 94 | ' |
Thereafter | 269 | ' |
Developed technology | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross Intangibles | ' | 390 |
Accumulated Amortization | 73 | ' |
Net Intangibles | 317 | ' |
Weighted Average Amortization Period (years) | '3 years 7 months 17 days | ' |
Customer base | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross Intangibles | ' | 470 |
Accumulated Amortization | 105 | ' |
Net Intangibles | 365 | ' |
Weighted Average Amortization Period (years) | '4 years 3 months 15 days | ' |
Trade name | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross Intangibles | ' | 70 |
Accumulated Amortization | 18 | ' |
Net Intangibles | 52 | ' |
Weighted Average Amortization Period (years) | '2 years 9 months 11 days | ' |
Noncompete agreement | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross Intangibles | ' | 10 |
Accumulated Amortization | 7 | ' |
Net Intangibles | $3 | ' |
Weighted Average Amortization Period (years) | '6 months | ' |
IMPAIRMENT_LOSSES_AND_RESTRUCT2
IMPAIRMENT LOSSES AND RESTRUCTURING CHARGES (Textuals) (Details) (USD $) | 9 Months Ended | 3 Months Ended | 9 Months Ended | 6 Months Ended | 3 Months Ended | ||||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2014 | Mar. 31, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Sep. 30, 2014 |
Domestic | Domestic | Domestic | Domestic | Domestic | Latin America | Latin America | Latin America | ||
Jonesboro | Jonesboro | Jonesboro | Corporate | Corporate | Costa Rica | Costa Rica | Costa Rica | ||
Employee-Related Costs | Facility Closing Costs | Employee-Related Costs | Other Restructuring | Employee-Related Costs | Facility Closing Costs | ||||
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expense | $2,468 | $792 | $192 | $600 | $284 | $1,300 | $1,392 | $1,004 | $388 |
Gain on early termination of lease | ' | 256 | ' | ' | ' | ' | ' | ' | ' |
Accrued outsourcing costs | 200 | ' | ' | ' | ' | ' | ' | ' | ' |
Restructuring, expected cost | ' | ' | ' | ' | ' | $500 | ' | ' | ' |
IMPAIRMENT_LOSSES_AND_RESTRUCT3
IMPAIRMENT LOSSES AND RESTRUCTURING CHARGES (Summary of Activity, Restructuring Plans) (Details) (USD $) | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 6 Months Ended | ||||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Mar. 31, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Jun. 30, 2014 |
Domestic | Domestic | Domestic | Domestic | Domestic | Latin America | Latin America | Latin America | ||
Jonesboro | Facility Closing Costs | Facility Closing Costs | Employee-Related Costs | Employee-Related Costs | Costa Rica | Facility Closing Costs | Employee-Related Costs | ||
Victoria | Jonesboro | Jonesboro | Corporate | Costa Rica | Costa Rica | ||||
Restructuring Reserve [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance as of December 31, 2013 | $16 | ' | $16 | ' | ' | ' | ' | ' | ' |
Expense | 2,468 | 792 | 0 | 600 | 192 | 284 | 1,392 | 388 | 1,004 |
Payments, net of receipts for sublease | -1,857 | -719 | 0 | ' | ' | -187 | -951 | ' | ' |
Balance as of June 30, 2014 | $627 | $73 | $16 | ' | ' | $97 | $441 | ' | ' |
NET_LOSS_PER_SHARE_Details
NET LOSS PER SHARE (Details) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Earnings Per Share [Abstract] | ' | ' |
Anti-dilutive securities excluded from computation of earnings per share (in shares) | 2,289,041 | 2,288,769 |
PRINCIPAL_CLIENTS_Details
PRINCIPAL CLIENTS (Details) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||||||||
In Thousands, unless otherwise specified | Jul. 28, 2011 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Jan. 04, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | ||||||||||
T-Mobile USA, Inc., a subsidiary of Deutsche Telekom | T-Mobile USA, Inc., a subsidiary of Deutsche Telekom | T-Mobile USA, Inc., a subsidiary of Deutsche Telekom | T-Mobile USA, Inc., a subsidiary of Deutsche Telekom | T-Mobile USA, Inc., a subsidiary of Deutsche Telekom | AT&T Services, Inc. and AT&T Mobility, LLC, subsidiaries of AT&T Inc. | AT&T Services, Inc. and AT&T Mobility, LLC, subsidiaries of AT&T Inc. | AT&T Services, Inc. and AT&T Mobility, LLC, subsidiaries of AT&T Inc. | AT&T Services, Inc. and AT&T Mobility, LLC, subsidiaries of AT&T Inc. | Comcast Cable Communications Management LLC, subsidiary of Comcast Corporation | Comcast Cable Communications Management LLC, subsidiary of Comcast Corporation | Comcast Cable Communications Management LLC, subsidiary of Comcast Corporation | Comcast Cable Communications Management LLC, subsidiary of Comcast Corporation | Comcast Cable Communications Management LLC, subsidiary of Comcast Corporation | Time Warner Cable Inc. | Time Warner Cable Inc. | |||||||||||
Revenue, Major Customers [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||
Revenue | ' | $19,594 | $16,469 | $57,018 | $44,846 | $13,598 | [1] | $14,868 | [1] | $42,695 | [1] | $42,770 | [1] | ' | $9,087 | [2] | $10,822 | [2] | $30,824 | [2] | $33,301 | [2] | $6,800 | [2] | $19,896 | [2] |
Revenue concentration, percentage | ' | 31.90% | 28.20% | 30.70% | 26.70% | 22.10% | [1] | 25.40% | [1] | 23.00% | [1] | 25.50% | [1] | ' | 14.80% | [2] | 18.50% | [2] | 16.60% | [2] | 19.80% | [2] | 11.10% | [2] | 10.70% | [2] |
Initial term of the master service agreement | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | '1 year | ' | ' | ' | ' | ' | ' | ||||||||||
Master services agreement, renewal term | '1 year | ' | ' | ' | ' | ' | ' | ' | ' | '1 year | ' | ' | ' | ' | ' | ' | ||||||||||
Notice of termination option of the initial term | '90 days | ' | ' | ' | ' | ' | ' | ' | ' | '90 days | ' | ' | ' | ' | ' | ' | ||||||||||
[1] | Revenue from this customer is generated through our Domestic and Asia Pacific segments. | |||||||||||||||||||||||||
[2] | Revenue from this customer is generated through our Domestic, Asia Pacific and Latin America segments. |
DERIVATIVE_INSTRUMENTS_Textual
DERIVATIVE INSTRUMENTS (Textual) (Details) (Foreign exchange contracts) | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 |
In Thousands, unless otherwise specified | USD ($) | Minimum [Member] | Maximum [Member] | Canadian Dollar | Canadian Dollar | Philippine Peso | Philippine Peso |
USD ($) | CAD | USD ($) | PHP | ||||
Derivative [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Derivatives, contract period | ' | '3 months | '12 months | ' | ' | ' | ' |
Derivatives, notional amount | $45,838 | ' | ' | $8,872 | 9,600 | $36,966 | 1,595,610 |
FAIR_VALUE_MEASUREMENTS_Recurr
FAIR VALUE MEASUREMENTS (Recurring and Nonrecurring) (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Nonrecurring | ' | ' |
Assets and Liabilities at Fair Value on a Nonrecurring Basis | ' | ' |
Property, plant and equipment, net | ' | $531 |
Total fair value of assets measured on a non-recurring basis | ' | 531 |
Accrued restructuring costs | 627 | 16 |
Total fair value of liabilities measured on a non-recurring basis | 627 | 16 |
Level 3 | Nonrecurring | ' | ' |
Assets and Liabilities at Fair Value on a Nonrecurring Basis | ' | ' |
Property, plant and equipment, net | ' | 531 |
Total fair value of assets measured on a non-recurring basis | ' | 531 |
Accrued restructuring costs | 627 | 16 |
Total fair value of liabilities measured on a non-recurring basis | 627 | 16 |
Foreign exchange contracts | Recurring | ' | ' |
Assets and Liabilities at Fair Value Measured on Recurring Basis | ' | ' |
Liabilities, Foreign exchange contracts | 1,932 | 2,160 |
Total fair value of liabilities measured on a recurring basis | 1,932 | 2,160 |
Foreign exchange contracts | Level 2 | Recurring | ' | ' |
Assets and Liabilities at Fair Value Measured on Recurring Basis | ' | ' |
Liabilities, Foreign exchange contracts | 1,932 | 2,160 |
Total fair value of liabilities measured on a recurring basis | $1,932 | $2,160 |
DEBT_Details
DEBT (Details) (USD $) | Sep. 30, 2014 |
Long-term Debt, Current and Noncurrent [Abstract] | ' |
Long-term debt | $1,000,000 |
Long-term debt, current portion | 367,000 |
Long-term debt net of current portion | 602,000 |
Revolving Credit Facility [Member] | ' |
Line of Credit Facility [Line Items] | ' |
Minimum borrowing capacity, upper limit | 15,000,000 |
Maximum borrowing capacity | 20,000,000 |
Increments for additional borrowing | 2,500,000 |
Borrowings outstanding under revolving credit facility | 2,500,000 |
Remaining borrowing capacity | 12,420,000 |
Amount outstanding for undrawn letters of credit issued under revolving credit facility | $80,000 |
SHAREBASED_COMPENSATION_Textua
SHARE-BASED COMPENSATION (Textuals (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Stock Awards Activity [Line Items] | ' | ' | ' | ' |
Total compensation cost | $343 | $398 | $1,207 | $1,255 |
Stock Options | ' | ' | ' | ' |
Stock Awards Activity [Line Items] | ' | ' | ' | ' |
Total unrecognized compensation cost | $1,632 | ' | $1,632 | ' |
Weighted-average period that cost is expected to be recognized | ' | ' | '1 year 10 months 13 days | ' |
ACCUMULATED_OTHER_COMPREHENSIV2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ' | ' |
Foreign Currency Translation Adjustment - Beginning balance | $1,900 | ' |
Derivatives Accounted for as Cash Flow Hedges - Beginning balance | -2,909 | ' |
Foreign currency translation | -657 | ' |
Reclassification to operations, derivatives | 2,367 | ' |
Unrealized gains (losses) | -2,140 | ' |
Foreign Currency Translation Adjustment - Ending balance | 1,243 | ' |
Derivatives Accounted for as Cash Flow Hedges - Ending balance | -2,682 | ' |
Total - Ending balance | ($1,439) | ($1,009) |
ACCUMULATED_OTHER_COMPREHENSIV3
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Reclassification (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ' | ' | ' | ' |
Cost of services | $52,393 | $51,928 | $162,946 | $150,965 |
Selling, general and administrative expenses | 7,503 | 7,153 | 23,052 | 21,601 |
Reclassification to operations | 341 | -1,168 | 2,367 | -994 |
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges | Foreign exchange contracts | Amount Reclassified from Accumulated Other Comprehensive Income | ' | ' | ' | ' |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ' | ' | ' | ' |
Cost of services | 324 | -1,099 | 2,215 | -925 |
Selling, general and administrative expenses | $17 | ($69) | $152 | ($69) |
SEGMENT_INFORMATION_Textual_De
SEGMENT INFORMATION (Textual) (Details) | 9 Months Ended |
Sep. 30, 2014 | |
segment | |
Segment Reporting Information [Line Items] | ' |
Number of reportable segments | 3 |
U.S. | ' |
Segment Reporting Information [Line Items] | ' |
Number of operating facilities | 8 |
Canada | ' |
Segment Reporting Information [Line Items] | ' |
Number of operating facilities | 1 |
Philippines | ' |
Segment Reporting Information [Line Items] | ' |
Number of operating facilities | 4 |
Honduras | ' |
Segment Reporting Information [Line Items] | ' |
Number of operating facilities | 2 |
SEGMENT_INFORMATION_Segment_Re
SEGMENT INFORMATION (Segment Reporting) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenue | $61,438 | $58,448 | $185,901 | $167,834 |
Gross profit | 9,045 | 6,520 | 22,955 | 16,869 |
Reportable Geographical Components [Member] | Domestic | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenue | 30,703 | 30,164 | 94,941 | 87,074 |
Gross profit | 3,041 | 2,963 | 10,225 | 9,432 |
Reportable Geographical Components [Member] | Asia Pacific | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenue | 22,469 | 20,470 | 64,558 | 60,031 |
Gross profit | 5,082 | 2,681 | 11,316 | 7,048 |
Reportable Geographical Components [Member] | Latin America | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenue | 8,266 | 7,814 | 26,402 | 20,729 |
Gross profit | $922 | $876 | $1,414 | $389 |
SUBSEQUENT_EVENT_Details
SUBSEQUENT EVENT (Details) (Collections Center, Inc. [Member], Subsequent Event [Member], USD $) | 0 Months Ended |
In Thousands, unless otherwise specified | Oct. 01, 2014 |
Collections Center, Inc. [Member] | Subsequent Event [Member] | ' |
Subsequent Event [Line Items] | ' |
Business acquisition, purchase price | $4,350 |